Tuesday, May 27, 2008

Luxury hotels shy away from Bial

Luxury hotels shy away from Bial
Financial Chronicle

LUXURY hotels are shying away from setting up projects near the fully-operational Bengaluru International Airport (Bial). According to Lodging Econometrics, a US-based research firm, Bangalore has around 31 projects with 7,371 rooms in the pipeline, but none of these proposed projects are coming up near the airport.

Skyrocketing land rates in Devanahalli, the location of the international airport, has made hospitality majors adopt a wait and watch policy. Moreover, the hospitality majors were skeptical about the readiness of the airport, leading to a delay in plans of buying lands.

“The exorbitant cost of land in and around Devanahalli is discouraging. People are holding on to their land parcels in the hope of getting better rates.

Therefore, setting up a hotel near the airport is not a viable option,” said P K Mohan Kumar, area director of Taj Hotels, Bangalore.

Though Taj Hotels has acquired land near Devanahalli, its plans to set up a hotel are still on the drawing board.

According to an industry expert, in the absence of branded five star hotels, Devanahalli and its surrounding areas are expected to see an influx of unbranded hotels that will take less than a year to become operational.

“Devanahalli is a gold mine to be unearthed.

Hoteliers have been late to encash opportunities in and around the airport areas. The value of real estate has gone up significantly in the last few years and will go up further,” said Aslam Gafoor, a city-based hospitality consultant.

The Bial has selected Oberoi Group to operate a five star hotel under the Trident brand. This hotel is being planned near the terminal, and will be ready only by 2010. Most hotel groups have only evinced interest in having a pres ence in Devanahall without any concrete action.

Even the Leela group has plans to set up a hotel in Devanahalli, but nothing has been firmed up yet.

At present, ITC Windsor-The Luxury Collection, Le Meridien, The Grand Ashok and Taj West End that are about 40 km from the new airport are the nearest branded five star hotels.

And for now, these four hotels will register higher room occupancy rate reaping benefits from the lack of more hotel rooms en route to the airport.

“Though the impact is not evident yet we are expecting higher occupancy rate due to our proximity to the airport,” said a spokesperson from ITC Windsor-The Luxury Collection.


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